Thinking that student loans will guarantee the career and financial success for you or your student? Before you find out how painfully wrong that might be, please take a look at the study published by Pew Research earlier this year.

What are the real consequences of Student loan debt???

By a number of benchmarks, young student debtors appear to be experiencing greater financial stress than comparable households lacking education debt.

Net worth

Young student debtor households have much less wealth than their peers not owing such debt.

Among the college educated, those lacking student debt had a median wealth of $64,700 in 2010.

By comparison those owing student debt had a median wealth of only $8,700. Among households headed by a young adult without a bachelor’s degree, those with no student debt had a median net worth of $10,900, while those with student debt had about a tenth of that ($1,200).

Financial Distress

By a number of benchmarks, young student debtors appear to be experiencing greater financial stress than comparable households lacking education debt.

Student debtors do seem to have more difficulty making timely debt payments.

About 9% of college-educated student debtors were 60 or more days late with their payments on any of their loans.

By comparison, only 3% of similarly educated debtors lacking student debt were late in their payments

For example, 21% of college-educated student debtors are underwater on their primary residence, compared with 11% lacking student debt.Bottom line Student debt is a burden whether or not a degree is awarded:” the wealth gap is also large for households headed by young adults without a bachelor’s degree: Those with no student debt have accumulated roughly nine times as much wealth as debtor households ($10,900 vs. $1,200). This is true despite the fact that debtors and non-debtors have nearly identical household incomes in each group.

Bottom line Student debt is a burden whether or not a degree is awarded:

“…the wealth gap is also large for households headed by young adults without a bachelor’s degree: Those with no student debt have accumulated roughly nine times as much wealth as debtor households ($10,900 vs. $1,200). This is true despite the fact that debtors and non-debtors have nearly identical household incomes in each group.”

College can be a rewarding and satisfying, but student debt can have a huge impact on that satisfaction and quality of life:

“Among young adult college graduates who borrowed money for college, 63% say the investment they made in their education has paid off. By comparison, among those who did not borrow money for college, 81% say college has paid off for them.”

An alternative to student debt and its consequences is learning a skill and finding immediate well paying employment to help you “learn as you earn,” often with employer paid tuition assistance. Shops in our precision machining industry are hiring and skills can be picked up in a year or less at community college.